I have a problem being around people and finding things to converse about. When Im around people i dont know I tend to not know what to talk about so I dont say much and get nervous. Im sure alot of people dont think I like them but I never really know what to talk about with people I dont know and its starting to get annoying. People must think Im some sort of outcast maybe? is this normal?

It's certainly very normal when you're young, just starting out dating, are of a quieter personality, & maybe add in a bit of shyness.
Age will take care of it in time, but until then, your best bet isn't to learn how to TALk so much as it is to LISTEN! It's coming up with a list of 5-10 questions that you can ask someone - everyone likes to think someone is interested in them! And the best thing is that after they've answered your question they may ask YOU one... if not, ask another question.
Small talk is a learned ability - start with being a good listener.... everyone loves them!

Most people love to talk about themselves. So think of something about that person that you could ask about that they might be interested in talking about. It could be there job, their kids, something they're wearing, etc. Just don't talk about yourself unless asked.

use "props", i.e. if you're in a grocery store, use a food item, if you're at a bookstore, use a book or subject area or something like that. use the environment or something around you to talk about and make a funny comment about it..even to just get a single giggle out of them. its more casual this way and less threatening than asking people too much about themselves..matter of fact, when i'd start talking to a strange girl in the mall or wherever, i almost never ask her name unless its after SEVERAL minutes.

Sometimes the best way to alleviate our fears is to actually face them.

I think that since you have identified being around people as being something you feel uncomfortable about that you should make it a pnt to place yourself amongst them at any given opportunity you can until you are able to overcome your fears.

Start out by going to where people are in different environments. Start out with something like the mall. Go shopping for something that interests you. While standing in line to pay make it a point to talk to somebody standing in line with you. Even if it is just to ask what time it is or to comment on the item they are buying.....think of something that you can talk about that will elicit some type of response from them. If the item they are purchasing is something you know something about say some thing like..."Oh, I see that you are buying that cellphone. I have the same model and I absloutely love it!!" Or if its a book, say something like..."Oh I can't help but notice that you're reading James Patterson....I read his last book $$$$$$ and I really enjoyed it!!!" As a first exercise this will warm you up to being comfortable with intiating a conversation with somebody and even if it doesn't get very far it will increase your confidence as you see others respond. After paying for your item or they have paid for theirs smile and wish them a good day.

Next time try changing the environment to a grocery store, pet store, library and try doing the same thing. Sign up for a course or hobby of interest where you will meet others with smilar interests. As the others have suggested...tune into listening and look for opportunities to make comment showing others that you are genuinely interested in what they have to say.

Make it a point to master this in the sense of overcoming your fear. Once you do you will look back on it as we all do once we see things as a risk well worth taking.

The other posters gave really great advice. Another thing I wanted to add was that maybe you just aren't a talker. Some people aren't. I certainly never was and never will be. I can churn out journals and novels with ease and joy, but when it comes to the spoken word I have no interest. I grew up with people telling me I was shy, I was nervous, I had to learn how to be interested in other people. But now that I'm older I realized that's all bull. I just simply don't like talking to people. Even people I know well, even my fiance. Whenever I'm around him I am usually reading or writing. People sometimes get insulted when they try to strike up conversations and I just nod and stare back at them, but that isn't my problem. But if you really do want to connect with the people talking to you,the best thing to do is to look interested.

When I used to drink (and I drank like sailor), I would sometimes find myself in the awkward position of having somebody talking to me, while I was so drunk I had no clue what they were saying. So what I would do was mimic their facial expressions and nod my head every now and then. I have carried on fifteen-minute conversations with people without processing one word they said. So when talking to someone, just keep asking them questions and setting your face in the appropriate expression. If they are agitated or outraged about something, open your eyes and mouth real wide and gape at them. If they are frustrated or angry, knit your eyebrows together and purse your lips. If they are happy, smile wide yourself. Always make eye contact. Occasionally burst out with things like "You don't say!" and "Oh my god!" and "Are you kidding?!" Things like that will show you are interested and also coax the other person to build up more steam with their conversation/rant/rambling, whatever.